The Manchester Airport Group (MAG) has now completed its £1.5bn acquisition of Stansted, from Heathrow Airport Holdings. MAG already owns Manchester, East Midlands and Bournemouth airports. Stansted’s main traffic is budget airlines such as Easyjet and Ryan Air flying to Europe, and Ryanair accounts for around 70% of its traffic. MAG wants to return Stansted’s passenger numbers to what they were 5 years ago by 2018, as it is now 47% below capacity and has been losing passengers for years. MAG wants to improve the shopping experience at the airport to encourage passengers to spend more before they board flights. They also intend to lobby transport chiefs about improving rail links between Stansted and London in the medium-term. On the day of the take-over Ryanair announced that it had been planning to expand its routes from Stansted by 5% from April, but would now cut them instead by some 9% or 1 million passengers per year, allegedly due to a 6% increase in charges (or the recession?).

Manchester Airport Group confirms Stansted takeover deal

The Manchester Airport Group (MAG) has completed its £1.5bn acquisition of Stansted Airport, from Heathrow Airport Holdings, the group confirmed.

MAG has added Stansted to its existing portfolio of Manchester, East Midlands and Bournemouth airports.

Funding came from Industry Funds Management (IFM), which has a 35.5% stake in the enlarged group.

Built in 1991, Stansted’s main traffic is provided by budget airlines such as Easyjet and Ryan Air flying to Europe.

Sir Richard Leese, leader of Manchester City Council, a MAG shareholder, said: “MAG is a key driver of jobs and growth in the North of England and the acquisition of Stansted will help us deliver maximum value for Manchester City Council and the other local authority shareholders.

“A larger, stronger MAG will benefit the whole region.”

Charlie Cornish, chief executive of MAG, said: “We aim to help fulfil its [Stansted] potential in the London market and bring more choice to its passengers in the years ahead.”

Christian Seymour, head of infrastructure, Europe, at IFM called the deal “a landmark acquisition” for the investment company calling it the “culmination of 18 months’ work developing a strong, long term partnership with MAG”.

The FT says in the short term Stansted will focus on its historical customer base: the point-to-point leisure traveller with a budget airlines, to Europe. But MAG hopes eventually to attract a wider variety of carriers and their customers, including those flying long-distance routes and offering first and business-class cabins.

MAG completes swoop of Stansted Airport

Manchester Airports Group today kicked-off its mission to transform the fortunes of Stansted Airport.

MAG has completed its £1.5bn swoop for the Essex gateway, in a move that saw Australian investor Industry Funds Management take a 35% in the group.

Chief executive Charlie Cornish has drawn-up a strategy he believes will return Stansted’s passenger numbers to what they were 5 years ago.

He also wants to improve the shopping experience at the airport to encourage passengers to spend more before they board flights.

It is hoped that will give Greater Manchester taxpayers a boost, with the region’s 10 councils having reduced their shareholdings in MAG as a result of IFM’s investment.

Manchester council leader Sir Richard Leese said: “MAG is a key driver of jobs and growth in the north of England and the acquisition of Stansted will help us deliver maximum value for Manchester council and the other local authority shareholders.

“A larger, stronger MAG will benefit the whole region and we welcome confirmation that the acquisition has been completed.”

He added: “Greater Manchester residents will gain from significantly increased returns in future years through greater dividends from a larger, strong Manchester Airports Group.

“These will make a contribution towards council services and help protect against the impact of future spending reductions as well as strengthening the position of the airport.”

Stansted is currently only at 47% capacity, with airline Ryanair accounting for around 70% of its traffic.

MAG believes it can improve the mix of airlines at the gateway, making use of its existing relationships at Manchester.

It is understood Mr Cornish is not planning any large-scale infrastructure projects in the short-term.

However, both MAG and IFM are eager to lobby transport chiefs about improving rail links between the airport and London in the medium-term.

“We aim to help fulfil its potential in the London market and bring more choice to its passengers in the years ahead. Today represents the achievement of a major strategic ambition for M.A.G and we look forward to working alongside staff, partners and stakeholders in ensuring the group’s success.”

Christian Seymour, head of infrastructure at IFM, said: “We are hugely pleased to complete the acquisition of our stake in M.A.G and Stansted. It is a landmark acquisition for IFM, deepening our footprint in the UK, and is the culmination of 18 months’ work developing a strong, long term partnership with MAG.

“We look forward to bringing our significant international expertise in the airport sector to the benefit of the group.”

It comes as it emerged IFM was one of the parties to have expressed an interest in buying Chicago’s Midaway Airport. As part of the deal, MAG could be brought on board as a consultant to advise on how to boost traffic and retail revenues at the American gateway

Ryanair claimed it had planned to grow its traffic at Stansted by 5% from April but will now cut frequencies on 43 of its routes and reduce its weekly operations by more than 170 flights.

The airline said the swingeing cuts could potentially lead to a loss of 1.1m passengers and more than 1,100 jobs at Stansted airport.

According to research, 1,000 jobs are sustained at airports for every 1m increase in passengers. [Not true!].

Robin Kiely, spokesman for Ryanair, said it is “impossible to understand” why Stansted’s prices will rise again from April when the airport has changed ownership.

“Ryanair and other Stansted airlines now must ask was this surprise price increase part of a “sweetener” package to persuade MAG to pay £1.5bn for Stansted?” he added.

Heathrow Airport Holdings declined to comment, pointing out the airport is now owned by MAG. However, it is understood the 6% rise is a part of a settlement made with the industry’s regulator, the Civil Aviation Authority five years ago.

Stansted is one of several UK airports, including Gatwick and Heathrow, that negotiates price increases every five years.

Both Gatwick and Heathrow recently submitted plans to the CAA for landing charges over the next five-year period, between 2014 and 2019.

An MAG spokesman said: “As part of our plans to grow passenger volume at Stansted over the short, medium and long term, we will continuously engage with all of the airlines that operate there, many of which are already valued customers of ours.”

FERROVIAL/BAA HIKES STANSTED FEES BY 6% FROM APRIL 2013 IN A PARTING GIFT TO MANCHESTER AIRPORT GROUP & A PARTING SLAP TO STANSTED’S AIRLINES & PASSENGERS

RYANAIR TO CUT ITS STANSTED TRAFFIC BY 9% IN RESPONSE TO THESE UNJUSTIFIED & INFLATION-BUSTING INCREASES

28.2.2013 (Ryanair’s website)

Ryanair, Europe’s only ultra-low cost carrier (ULCC), today (28 Feb) announced that it will cut its London Stansted traffic by 9% over the coming year (from 12.5m to 11.4m) after the Ferrovial/BAA Stansted monopoly announced a further unjustified increase of Stansted’s already high charges of 6% from April 2013, despite the fact that Ferrovial/BAA has sold Stansted to Manchester Airport Group (MAG) who will take over the airport sometime before the end of March.

Ryanair has called on Stansted’s regulator, the CAA, to investigate whether this unjustified and unwarranted 6% price hike was a “sweetener” by Ferrovial/BAA’s sale of Stansted, which raised £1.5bn in proceeds for Ferrovial, despite the fact that Stansted’s traffic has declined from 24m p.a. to 17.5m p.a. over the last 6 years.

Ryanair, which had planned to grow its Stansted traffic by 5% from April 2013, will now cut frequencies on 43 of its routes and reduce its weekly operations by over 170 flights, with the loss of 1.1m passengers (-9%) and over 1,100* jobs at Stansted, in direct response to this unwarranted and unjustified 6% price hike. Ryanair called on the CAA regulator to explain why Ferrovial/BAA is allowed to hike charges by 6% when UK inflation is less than 3% and Stansted’s traffic continues to decline.

Ryanair also called on Ferrovial/BAA to reverse this unjustified and unwarranted price increase before the sale to MAG is concluded and further called on MAG to confirm that it will not permit any further price increases at Stansted unless, or until, the traffic declines of the past 6 years (during which the Ferrovial/BAA monopoly has doubled Stansted’s fees) are reversed.

Ryanair’s Robin Kiely said,

“It’s bad enough that Ferrovial/BAA has doubled prices over the past 6 years and presided over record traffic falls at Stansted, but it appears that the CAA now rewards this commercial failure by allowing Ferrovial/BAA to again raise fees in 2013 to compensate for its traffic declines in 2012.

Given that Ferrovial/BAA has now agreed to sell the airport to MAG, it is impossible to understand why the BAA monopoly is again raising Stansted’s prices from April 2013 when it clearly won’t be running the airport from that date. Ryanair and other Stansted airlines now must ask was this surprise price increase part of a “sweetener” package to persuade MAG to pay £1.5bn for Stansted? Are passengers and airlines at Stansted again being hit in order to boost the sales proceeds for the Spanish giant, Ferrovial, from the sale of BAA Stansted?

As the London Times has previously commented, the appropriate response to a traffic decline would be to lower prices and grow volumes. Instead the Ferrovial/BAA monopoly, as it runs down the runway trousering £1.5bn from the sale of Stansted, is imposing a further, unjustified 6% price increase one month in advance of MAG’s takeover of Stansted. There’s something very smelly about the timing and the scale of this price increase, which is more than double the rate of UK inflation.

Ryanair believes that this price increase, which will clearly be of no benefit to Ferrovial/BAA, was part of a “sweetener” to MAG in order to boost the sale price of Stansted Airport. The CAA must now investigate the reasons for this price increase and take action to protect Stansted users from this latest example of price gouging from Ferrovial/BAA. ”

* ACI research confirms up to 1,000 ‘on-site’ jobs are sustained at international airports for every 1m passengers [This really is not true – the figure has been bandied about for years, but the real figure is more like a quarter. Airlines and airports are cutting jobs to increase profits. The 1,000 figure was an exaggeration even many years ago, and it completely out of date now. See below for some EasyJet jobs figures. AW].

MAG completes £1.5 billion deal to buy Stansted

By Rob Gill

28 Feb 2013 (Buying Business travel)

Manchester Airports Group has become the new owner of Stansted after completing its £1.5 billion purchase of the Essex airport.

MAG, which had its offer for Stansted accepted last month, has bought the airport from Heathrow Airport Holdings, previously known as BAA, which was ordered to sell Stansted by the Competition Commission.

Charlie Cornish, chief executive of MAG, said: “We’re delighted to have added Stansted to our strong portfolio of UK airports. We aim to help fulfil its potential in the London market and bring more choice to its passengers in the years ahead.

“Today represents the achievement of a major strategic ambition for MAG and we look forward to working alongside staff, partners and stakeholders in ensuring the group’s success.”

MAG already owns Manchester airport as well as East Midlands and Bournemouth which collectively serve more than 23.9 million passengers per year. The company is owned by the 10 borough councils which make up the Greater Manchester area.

Stansted catered for 17.5 million passengers during 2012 although this was down 3.2 per cent on the previous year.

Sir Richard Leese, leader of Manchester City Council, a MAG shareholder, added: “MAG is a key driver of jobs and growth in the north of England and the acquisition of Stansted will help us deliver maximum value for Manchester City Council and the other local authority shareholders.

“A larger, stronger MAG will benefit the whole region and we welcome confirmation that the acquisition has been completed.”

Stansted to be sold for £1.5bn to Manchester Airports Group

Date added: January 18, 2013

Manchester Airports Group has won the bidding process to buy Stansted, at £1.5 billion – higher than commentators though the price would be, when bidding closed two days ago. MAG will now own Stansted, Manchester, East Midlands and Bournemouth airports. Heathrow Airport Holdings, will retain only 4 UK airports compared with its original 7 – Heathrow, Glasgow, Southampton and Aberdeen. The sale is expected to close by the end of February. MAG also includes the commercial property company, MAG Developments, which has a £350m portfolio across its existing 3 airports and is leading the £650m Enterprise Zone development, Airport City, at Manchester. MAG also runs businesses in car parking, airport security, firefighting, engineering, advertising and motor transport. As part of the transaction, Australian infrastructure investment group Industry Funds Management (IFM) will become an investor in MAG, invest new equity and take a 35.5% stake in the enlarged group. Gatwick sold for £1.51 billion and Edinburgh sold for £807 million. Click here to view full story…